Rabat – The International Monetary Fund’s (IMF) Executive Board has approved the second review of Morocco’s Resilience and Sustainability Facility (RSF), releasing an additional $415 million to further Morocco’s transition toward a greener economy.
The IMF’s approval enables Morocco to access a total of $747 million under the Resilience and Sustainability Facility, backing its efforts to enhance climate resilience amid persistent challenges like drought, which has impacted agriculture in 2024.
In September 2023, the IMF Executive Board approved an 18-month arrangement for Morocco under the Resilience and Sustainability Facility (RSF), amounting to $1.32 billion.
Despite these difficulties, Morocco’s economy has shown stability, driven by robust non-agricultural sectors and stronger domestic demand. Rising revenues from tourism, exports, and remittances have kept the current account deficit low, while the fiscal deficit remains within budget targets. Bank Al-Maghrib’s (BAM) recent interest rate cut reflects easing inflation pressures.
Aligned with the RSF’s objectives, Morocco has made substantial investments in water infrastructure to tackle water scarcity, though continued efforts in sustainable water management remain essential.
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For Morocco to achieve its climate goals, expanding private sector participation in renewable energy through liberalizing the electricity market is also key. This will also reduce reliance on imported fuels, and help with the creation of jobs.
IMF Deputy Managing Director Kenji Okamura praised Morocco’s dedication to climate resilience in a recent statement, saying, “The Moroccan authorities continue to make steady progress on strengthening resilience to climate change.”
He noted Morocco’s careful approach to decarbonization, which prioritizes coal and pollutant excises over value-added taxes on fossil fuels to limit social impact. Okamura also pointed out the need to complete remaining RSF reforms, including electricity sector liberalization, tax system adjustments for environmental goals, and managing fiscal and financial climate risks.
Last week, the World Bank prepared to approve a $250 million financing package to transform Morocco’s municipal solid waste (MSW) sector. This funding, also part of efforts to address the mounting environmental and fiscal challenges in waste management, aims to boost sector governance, ensure financial sustainability, and improve environmental practices.
The financing will support Morocco’s Municipal Solid Waste Management Program, aligned with the National Household Waste Recovery Program, and is set to run from 2023 to 2034 to raise the recycling rate from 7% to 25% by 2034.
